CoreLogic Data Brief_ April 2019
Bay Area Housing Market Shows Signs of Modest Strengthening in April; Region’s Median Sale Price Matches the Year-Ago Level
New data released today by CoreLogic® shows a total of 6,987 new and existing houses and condominiums were sold in Alameda, Contra Costa, Marin, Napa, Santa Clara, San Francisco, San Mateo, Solano and Sonoma counties in April 2019. This number is up 13.7% month over month from 6,147 sales in March 2019,* and down 7.6% year over year from 7,560 sales in April 2018.
Total April 2019 home sales in the San Francisco Bay Area were the lowest for that month since 6,927 homes sold in April 2017. Sales have fallen on a year-over-year basis for the past nine consecutive months. However, April’s 7.6% year-over-year decline in sales was the lowest for any month since October 2018, when the annual decline was 6.5%.
Since 1988, the average change in San Francisco Bay Area home sales between March and April is a gain of 4.1%. April sales have ranged from a low of 5,636 in 1995, to a high of 14,430 in 2004. April 2019 sales were 20% below the April average of 8,729.
In April 2019, sales of newly-built homes (detached houses and condos combined) were 39.8% below the month’s historical average, while resales were 17.8% below the month’s average. Ignoring the 2003–2006 housing boom that was fueled by risky home loans, April 2019 resales were 13.7% below the long-term average for the month.
“Bay Area home sales quickened a bit this April, with an above-average increase in activity from March and the smallest year-over-year decline for any month since last October,” said Andrew LePage, a CoreLogic analyst. “This suggests declining mortgage rates and increased inventory this spring helped attract buyers. This might include people who backed out of a tighter, more frenzied market last year when rising prices and mortgage rates priced out some and made others worry about buying near a peak.”
The median price paid for all homes sold in the San Francisco Bay Area in April 2019 was $850,000, up 2.4% from $830,000 in March and unchanged from $850,000 in April 2018.
The lack of a year-over-year change in the median sale price this April comes after a tiny, 0.1% annual decline this March. The latter was the first year-over-year decrease in seven years, since March 2012. The region’s highest-ever median sale price was $875,000 in June 2018.
“For the past two months, the median sale price and other data have indicated that home prices across much of the Bay Area have basically flattened out compared with a year earlier. This is a trend we’ve seen in much of coastal California,” LePage said. “Five of the Bay Area’s nine counties logged annual declines in their overall median sale prices last month, ranging from 0.8% to 6.5%. Slower sales and more modest price growth, if any, over the past year suggests that despite a healthy economy, the cost of homeownership has outpaced the incomes of many. Most buyers don’t have the option of turning to the kinds of high-risk mortgages many used to stretch beyond their financial means during the last housing boom, keeping upward pressure on prices. Looking ahead, a variety of factors including inventory levels, mortgage rates and job growth will help determine the course of home prices during the spring-summer homebuying season.”
Home sales of $500,000 or more accounted for 80.6% of all sales in April 2019, up from 79.1% in March 2019 and up from 79.6% in April 2018.
Additional San Francisco Bay Area Highlights for March 2019:
►►Absentee buyers—mostly investors, but also second-home buyers—bought 15.4% of all homes sold in April 2019. This is down from 16.7% in March 2019, and down from 18.5% in April 2018. The absentee buyer share peaked at 28.8% in February 2013, and since 2000, the monthly average has been 16.5%.
►►Jumbo mortgages accounted for 40.6% of the total number of home purchase loans used in the San Francisco Bay Area in April 2019, up from 38% in March 2019 and down from 41.9% in April 2018.
►►Jumbo loans represented 62.3% of the total dollar volume of all home purchase originations in April 2019, up from 60.4% in March 2019 and down from 63.6% in April 2018.
►►Jumbo loans are those that exceed the “conforming loan limit,” which is regulated and varies by county. Nationally, the base conforming loan limit for single-family homes in 2019 is $484,350, up from $453,100 in 2018. In high-cost areas, including most of the San Francisco Bay Area, the limit is now $726,525, up from the 2018 maximum of $679,650.
►►Adjustable-rate mortgages (ARMs) made up 24.9% of the number of purchase loans used to buy homes in the Bay Area in April 2019. This is up from 24.7% in March 2019 and up from 23.9% in April 2018. ARMs, which offer lower initial interest rates and monthly payments compared with fixed-rate mortgages, are more common in the middle and high-end of the market where the impact on monthly payments is larger. In April 2019, the median price paid for Bay Area homes purchased with ARMs was $1,225,000, compared with a median of $850,000 for all homes purchased. The ARM share ranged from 4.3% of purchase loans in Solano County to 41.5% in San Francisco County.
►► Real estate-owned (REO) sales represented 0.8% of total San Francisco Bay Area home sales in April 2019, unchanged from March 2019 and down from 0.6% in April 2018. REOs are foreclosed homes that lenders sold on the open market.